It's different if you are having your customers type in their details, even though they hope you will charge them $19.95, and not double charge them or steal their credit card information - this is a reason why people use PayPal.
But yeah, like you said it is fraud, though a business could argue shipping charges or tax or "addon pricing" or whatever for a small amount (a company I would see doing this is GoDaddy), but larger amounts their PayPal account would probably be banned.
Good luck with that. It's very hard to get your money back when the merchant knows how to answer Paypal's questions. I failed at doing so when a merchant sold me something he could not deliver and then insisted on giving me a voucher instead returning my money.
The difference is that if I want to order some two dollar bike parts, I'm happy to risk that I won't receive them, but I'm not in the habit of giving my credit card to every random site on the internet.
I wouldn't be astonished to see chargebacks (by buyers who think they were overcharged) resulting from this - that can hardly be in anyones interest.